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The Court application process for Financial Settlements
If the parties can’t reach agreement, the next stage is to issue Court proceedings. Before commencing Court proceedings, most cases (with only a few exceptions) must be referred to mediation. If mediation is not appropriate, or if it fails to produce agreement, an application to the Court can be made.
Step 1 – Issuing an Application
Either the Applicant or Respondent can start proceedings by issuing an application for a Financial Settlement agreement. A fee is paid to the Court when the form is lodged.
Upon receipt of the application, the Court issues a time-table requiring each party to file and serve financial statements within a specified period. Financial statements are provided on a standard form (Form E).
Form E requires full disclosure of all income and assets, and the production of various documents such as bank statements, P60s, business accounts, pension transfer values and so on.
The timetable usually allows for either party to raise questions they may have about the other’s financial statement, prior to the first Court appointment. A schedule of assets is prepared jointly for the court together with a statement of the issues in the case.
The timetable also sets a date for the First Court Hearing – usually around 3 months after the application is issued, to allow for the preparation of financial statements and any negotiation.
Step 2 – First Hearing (FDA)
The first Court hearing is known as the First Directions Appointment (FDA). It’s usually a short hearing when the Judge considers each party’s financial statements and questionnaires, and gives direction as to what further evidence, if any, is needed.
The Court will set a time limit for the filing of any further evidence and will adjourn for a further hearing.
Step 3 – Second Hearing (FDR)
The second hearing is known as a Financial Dispute Resolution Hearing (FDR). It normally takes place around 8-10 weeks after the first hearing.
At the FDR each party’s lawyers are asked to summarise their client’s position. The Judge will usually indicate the sort of Order he would be inclined to make at a final hearing. The Judge will urge the parties to try to reach agreement and ensure that they are aware of costs being incurred.
Many cases settle at the FDR because parties review their position in the light of the Judge’s indications. If agreement is reached, this agreement can be incorporated into an Order and the Judge can be asked to approve the Order at this hearing.
The Judge can’t compel parties to reach agreement. If agreement isn’t reached the Judge will order the case go to a final hearing. If this happens, this Judge can’t sit at the final hearing. The Judge at the final hearing won’t be aware of the indication given by the Judge at the FDR, so will approach the case completely afresh.
Step 4 – Final Hearing
If the case proceeds to a final hearing, each party will give evidence on oath. They will also be cross-examined by the other party’s lawyer. At the end of the hearing the Judge will make a decision as to the Final Order.
The Judge has wide ranging discretion and will make the Order that they consider to be fair. Given that the Judge has a wide discretion, in most circumstances it’s unlikely that an appeal against the decision will be realistic.
Given the uncertainty of the outcome, it is preferable for clients to reach agreement prior to a final hearing.
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